A shift in the mix of home buyers has been occurring since the pandemic began. Investor numbers are shrinking, while the number of home shoppers purchasing their first home ever is on the rise. These buyers are freed from having to sell a home prior to purchasing, and they are valuing homeownership in a pandemic.
The share of first-time buyers rose to 36% in April 2020, up from 32% a year ago, the National Association of REALTORS®’’ April 2020 REALTORS® Confidence Index Survey shows.
Continue… https://magazine.realtor/daily-news/2020/05/26/more-first-time-home-buyers-are-entering-the-market

For Some, 30-Year Rates at 2.5% Are Possible

May 19, 2020

Borrowers with top-notch credit are scoring mortgage rates lower than the record average lows being reported. Freddie Mac announced the 30-year fixed-rate mortgage averaged 3.28% for the week ending May 14, but home shoppers with stellar credit could snag one with a rate of about 2.5%, according to The Mortgage Reports.

The Mortgage Reports’ daily rate survey shows that rates for 30-year, fixed rates for FHA and VA loans have fallen to 2.75%, in some cases. Borrowers with high credit scores, little debt, solid equity, and who shop around tend to find the lowest deals, The Mortgage Reports notes.

United Wholesale Mortgage, a residential mortgage lender, announced a 2.5% “Conquest” loan program for the 30-year, fixed- rate mortgage. “Some people said we’d never see interest rates drop below 3 percent on a 30-year mortgage,” says Mat Ishbia, United Wholesale Mortgage’s president and CEO. “We believe that the housing market is going to be strong, and we want to do our part to help more people get into their dream homes as we get through this pandemic together as a nation.”

Chase Bank followed suit by also offering mortgage rates below 3% on 30-year fixed-rate loans. Its offering for 30-year rates is as low as 2.875% (with a 2.944% APR).

Rates below 3% appear to be mostly reserved for purchase contracts and not refinancings, The Mortgage Reports notes. Refinance rates, for comparison, are falling in the 3.5% to 4% range.Source: “2.5% Mortgage Rates Are Here. What’s Next—2%? Or Even 1%?” The Mortgage Reports (May 18, 2020)

Record low mortgage rates are sticking around. The week ending May 14 marks the sixth consecutive week that mortgage rates have stayed at or near all-time lows. The 30-year fixed-rate averaged 3.28% this week, Freddie Mac reports.
“Mortgage rates have stabilized at very low levels over the last few weeks as homebuyer demand slowly improves,” says Sam Khater, Freddie Mac’s chief economist. “Although purchase applications reached a new low in mid-April, purchase demand today is only down 10% from one year ago. While demand is improving, inventory is low and declining with no signs of a turnaround yet.”
Continue… https://magazine.realtor/daily-news/2020/05/15/mortgage-rates-remain-near-record-low-for-6th-week

Home prices in the first quarter of the year were up in nearly all major U.S. cities, and despite the continuing difficulties of the COVID-19 pandemic, prices show no signs of slowing, according to the National Association of REALTORS®’ latest quarterly report.
The median price nationwide for an existing single-family home was $274,600 in the first quarter, a 7.7% increase year over year. “The first-quarter price jumps mostly reflect conditions prior to the coronavirus outbreak and show the strength of housing demand prior to the pandemic,” says NAR Chief Economist Lawrence Yun. “Even now, due to very limited listings, home prices are showing no signs of buckling.”

Continue…https://magazine.realtor/daily-news/2020/05/12/nar-healthy-q1-home-price-gains-won-t-slow-down

Homeowners Are Preparing to List After the Pandemic

May 7, 2020

Real estate professionals report that about 77% of potential sellers are preparing to sell their homes once stay-at-home orders from the COVID-19 pandemic are lifted, according to a newly released survey from the National Association of REALTORS®. More than half of REALTORS® report their clients are taking on do-it-yourself home improvement projects in preparation, too.

“After a pause, home sellers are gearing up to list their properties with the reopening of the economy,” says Lawrence Yun, NAR’s chief economist. “Plenty of buyers also appear ready to take advantage of record-low mortgage rates and the stability that comes with these locked-in monthly payments into future years.”

NAR conducted an Economic Pulse Flash Survey May 3-4 and asked about 2,500 members how the coronavirus has been affecting their real estate business.

Home buyers are gradually re-emerging, but the pandemic has shifted some of their housing preferences, according to the results. Five percent of REALTORS® report that their clients have changed their neighborhood preferences from urban to suburban due to the pandemic. Also, one in eight REALTORS® surveyed say that buyers have changed at least one home feature that’s important to them since the COVID-19 pandemic. The most common features identified are home offices, yard space for exercising or growing food, and more space to accommodate their family.

After the Pandemic, Will Consumers Want Larger Housing?

What Owners Like, Dislike About Their Homes When Sheltering

How to Work With Home Stagers Remotely

Many REALTORS® Report No Closing Delays

But home buyers in search of a big bargain may not find one. Nearly 75% of REALTORS® report that their sellers have not reduced listing prices to attract buyers. Housing inventories are near record lows and that reduced competition may be prompting more sellers to stand firm on their home prices.

View NAR’s weekly housing market monitor.Source: National Association of REALTORS®

Top New-Home Features in 2020

April 7, 2020

Closets, energy efficiency, and laundry rooms appear to be home builders’ top priorities in the single-family homes they’re constructing this year.

The National Association of Home Builders conducts a nationwide survey each year to find out what home features builders are most likely to include in a typical new home. The walk-in closet in the master bedroom was the most popular home feature builders cited, according to the survey. Energy-efficient features were popular, too, such as efficient lighting, programmable thermostat, Energy Star–rated appliances, and windows. Kitchens were most likely to have a central island, a walk-in pantry, and granite countertops, the NAHB survey shows.

On the other hand, the least likely features builders were to include in the price of the home were cork flooring for the living areas on the main floor, geothermal heat pumps, solar power systems, and dual toilets in the master bath. Also, specialty rooms unlikely to be included were sun rooms, media rooms, and two-story family rooms or foyers.Source: “Most Likely (Unlikely) Features in New Single-Family Homes in 2020,” National Association of Home Builders’ Eye on Housing blog (March 25, 2020)

Record low mortgage rates last week may have offered up plenty of incentive for home buyers, even in a pandemic. Mortgage applications for home purchases increased 7% this week, which follows a 12% uptick last week, the Mortgage Bankers Association reports. Mortgage applications are viewed as a gauge for upcoming home sales.This marks the third week in a row that purchase volume in mortgage applications has increased. The strongest growth in purchase applications was reported in Arizona, Texas, and California, the MBA reports.
Continue…https://magazine.realtor/daily-news/2020/05/07/another-strong-week-for-mortgage-applications

Mortgage rates reached a new record low this week, with the 30-year fixed-rate mortgage falling to its lowest average ever since Freddie Mac began tracking such data in 1971. “The size and depth of the secondary mortgage market is helping to keep rates at record lows,” says Sam Khater, Freddie Mac’s chief economist. “These low rates are driving higher refinance activity and have modestly helped improve purchase demand from their extremely low levels in mid-April. While many people are benefiting from low mortgage rates, it’s important to remember not all people are able to take advantage of them given the current pandemic.”
Continue…https://magazine.realtor/daily-news/2020/05/01/mortgage-rates-dip-to-new-record-low

Mortgage Rates Dip to New Record Low

May 1, 2020

Mortgage rates reached a new record low this week, with the 30-year fixed-rate mortgage falling to its lowest average ever since Freddie Mac began tracking such data in 1971. “The size and depth of the secondary mortgage market is helping to keep rates at record lows,” says Sam Khater, Freddie Mac’s chief economist. “These low rates are driving higher refinance activity and have modestly helped improve purchase demand from their extremely low levels in mid-April. While many people are benefiting from low mortgage rates, it’s important to remember not all people are able to take advantage of them given the current pandemic.”

Freddie Mac reported the following national averages with mortgage rates for the week ending April 30:

• 30-year fixed-rate mortgages: averaged 3.23%, with an average 0.7 point, falling from last week’s 3.33% average. The previous all-time low for the 30-year mortgage was 3.29%, set during the week ending March 5. A year ago, 30-year rates averaged 4.14%.
• 15-year fixed-rate mortgage: averaged 2.77%, with an average 0.6 point, falling from a 2.86% average. A year ago, 15-year rates averaged 3.60%.
• 5-year hybrid adjustable-rate mortgages: averaged 3.14%, with an average 0.4 point, dropping from a 3.28% average. A year ago, 5-year ARMs averaged 3.68%.

Freddie Mac reports average commitment rates, along with average fees and points, to reflect the total upfront cost of obtaining a mortgage.Source: Freddie MacComment

Most REALTORS® Confident That Home Prices Will Stand Firm

April 29, 2020

Many real estate professionals don’t foresee a significant drop in home prices from the COVID-19 pandemic, and certainly not to the degree of the Great Recession’s impact on the housing market. For residential property prices over the next 12 months, 38% of more than 4,000 REALTORS® say they expect prices to increase and 23% expect prices to remain stable, according to the March 2020 REALTORS® Confidence Index Survey, a monthly survey of real estate transactions conducted by the National Association of REALTORS®. 

“Although the pandemic continues to be a major disruption in regards to the timing of home sales, home prices have been holding up well,” Lawrence Yun, NAR’s chief economist, said in a statement following a report on pending home sales in March. “In fact, due to the ongoing housing shortage, home prices are likely to squeeze out a gain in 2020 to a new record high.”

Home prices were still rising across the country as the pandemic widened in scope in the U.S. in March. As of March, the median home sales price increased 8% year over year to $282,500, according to NAR.

The following chart compares February to March 2020 REALTOR® member projections on home prices.

“Prices have held up due to a combination of measures under the $2.2 trillion CARES Act passed plus the additional $484 billion funding passed April 23 to pay for unemployment insurance benefit claims and payroll assistance for small businesses,” Scholastica Cororaton, a research economist for NAR, notes on the association’s Economists’ Outlook blog.

The median list prices in several markets are still up compared to a year ago, according to realtor.com® data. For example, in Los Angeles, the median list price is up 16% compared to a year ago, while in Las Vegas and Denver, median listing prices are up by 3.6% and 3.5%, respectively, compared to a year ago. In the New York-New Jersey area, which has accounted for the largest share of coronavirus cases in the country, median listing prices are still up from one year ago by 2.9%.

As of April 18, 58 of the 100 largest metros were still seeing higher median listing prices when compared to a year prior, according to realtor.com® data. Properties were staying on the market longer—six more days during the week of April 18 compared to April 2019.

But markets like Washington, D.C., were seeing median list prices up by 4.4% the week of April 18 compared to a year prior.

To view the interactive charts showing the trajectory of median list prices among the 100 metro areas as of April 18, visit NAR’s Economists’ Outlook blog.Source: “Most REALTORS® Don’t Expect Steep Price Declines in Next 12 Months,” National Association of REALTORS® Economists’ Outlook blog (April 27, 2020)